The Central Bank of Nigeria (CBN) adjusted spot rates on Treasury bills by 100 basis points at the just concluded primary market auction, according to the results.
A slew of fixed interest securities asset traders expected demand to remain solid in spite of the liquidity position in the financial system.
However, in an effort to achieve liquidity mop-up, only N561.71 billion was allotted, according to an email sent by CardinalStone Limited to investors.
Closing the auction, the CBN increased stop rates across the 91-day and 182-day bills by 100bps apiece to settle at 8.00% and 12.00%, respectively. Meanwhile, the monetary authority kept the rate on 364-day bills at 16.75%.
Thus, the average yield was unchanged at 12.7% amidst an expectation that the financial system liquidity would descend further due to near-zero maturing instruments in the market.
Across the curve, the average yield was flat at the short and mid segments but contracted at the long (-1bp) end as participants demanded the 337-day to-maturity bill. Due to this buying momentum, the long-dated bill yield declined by a basis point.
Meanwhile, the average yield pared by 1bp to 14.7% in the OMO bill segment. Similarly, the FGN bonds secondary market traded in a lull as the average yield closed flat at 15.9%.
The overnight lending rate expanded by 133 basis points to 25.2%, despite the inflow from FGN bond coupon payments worth N9.44 billion.
